Education Nov, 16 2012

Preschool franchise: foundation for future success

Emergence of large number of preschool brands into franchising is creating a plethora of business opportunities for aspirants. Read on to explore lucrative preschool franchise partnership opportunities available in India.

By Rita G Chauhan
Sub-Editor
Preschool franchise: foundation for future success

As per a report by CLSA Asia Pacific Markets, the current preschool education segment in India is nearly USD 985 million and it is estimated to touch USD 3,426 million by the end of 2012. With entry of a number of reputed brands, country’s preschool education sector is witnessing immense growth and development. As more and more brands are opting for franchise route to scale up their presence, this has further popularised the concept among the upcoming entrepreneurs. Apart from owning a profitable business, the need of providing of quality education in preschool space also motivates many aspirants to take off. Sharing the motivating factors that led Eurokids to enter the preschool sector, Amit Singh SBU – Head EuroKids shares, “Indian pre- school industry lacked a standardised, structured and age appropriate curriculum and was run mostly by individuals with limited/no experience and resources. The strong need for quality education acted as our motivation”.

Preschool franchise, a profitable biz

Pre-schools, popularly known as playschools, cater to children aged between two to four, the time when about 40 per cent of a person’s memory and ability to learn is developed. Due to the incereasing demand of quality and modern early education concepts in India, the idea of owning a preschool franchise seems a profitable decision for interested investors. The demand is expected to remain strong in the growing economic scenario fueled by expanding middle class population, incerease in number of working women and constant innovation in this sector. Further, this business concept appeals a lot of women entrepreneurs, who prefer comfortable and relaxed work timings so that they can easily manage work and home and want to contribute to the society.

From the franchisor’s perspective, preschool business is not only lucrative; it is also relatively easier to start because there are not many rules and regulations for entering into this business. Moreover, franchising helps them to quickly build up their presence in targeted geogrphies. Vittal Bhandary, MD, Learning Edge India Pvt Ltd says, “Fanchising is the ideal way to expand any business today, but it's not something to embark on lightly. Our expansion through franchising primarily means exposing Little Elly to many more children in every neighbourhood”.

Prominent players

Over the years, many preschool brands have come up in India. Among the more prominent brands are names such as EuroKids, Shemrock Schools, Kangaroo Kids, Kidzee, Little Elly, Edify, Serra International, Podar Jumbo Kids, Hello Kids, Sesame, and Sunshine etc.

Benefits of owning a preschool franchise

Preschool franchise business model offers several advatnatges for a potential franchisee. Franchising reduces the risk and gestation period associated with any business and provides an easy transfer of technical knowledge and the well structured procedures and policies laid out by the franchisor.

Amit Singh of EuroKids explains, “Franchising is the fundamental manner in which we conduct our business. At EuroKids we very strongly believe that we can be successful if our franchisees are successful first.” 

The advantage of a partnering with a known brand helps in attracting more parents towards school and hence more business for the franchise owner. He start can expect quick return on investment. Besides, a franchisee doesn’t have to worry about research and development of curriculum as a set preschool curriculum developed by experts is provided by franchisors.

Brands also provide necessary training and support for business development incuding marketing and promotional support. Sunita Agrawal, Director, Hello Kids Education India Pvt. Ltd. shares, “We personally take care of all business issues with all franchisees across India and makes sure that every single owner is satisfied with the Hello Kids support.”

Hurdles on the way

Al though the preschool sector offers tremendous opportunities for growth but franchisee sometimes may have to face certain challanges to achieve a desired success. Presently, playschools are primarily an   urban phenomenon and rural areas are still to catch on this trend. Also, due to the lack of regulatory mechanism as a result unorganised players are mushrooming in this sector. Moreover, a number of parents are not aware of modern education techniques and they don’t understand the importance of brand preschools and hence compromise on quality of services.

Opportunity for prospective franchisees

Franchisees looking to partner with a recognised preschool brand may explore these options.

Delhi's leading preschool brand Shemrock plans to ramp up its current presence in India. It will target select markets in Tier I and tier II Indian cities. By the end of the fiscal year, Shemrock is targting to have more than 40 preschools in its franchisee network. An intrested franchisee needs a capital of Rs 6-7 lakhs to associate with the brand. Aiming to become the largest player in the preschool industry by the year 2017 and have the maximum number of centers across India, Hello Kids plans to have over 180 centres by 2012. Presently it opertes 170 plus centres across 21 Indian states. Franchise facts for Hello Kids are Rs 2.5 lakhs for rural market (including Mumba) and Rs 3.5 - 5.5 lakh for urban areas and area requiremnt is 500 plus sq ft.  Podar Jumbo Kids will continue to expand in India and are even looking at international expansion. Currently, the brand has approximately 90 franchise centers and 60 management owned centers. Its potential franchisee will need an investment around 6-7 lakh along with an area of 1200 sq ft (min). Eurokids today has a strong network of 880 preschools which includes 23 company-0wned schools spread across in 300 towns and cities in India. An investor wanting to own a Euro Kids franchise requires an investment ranging between Rs 8- 12 lakh.

To conclude it can be said that as preschool industry is a booming business segment, a franchisees can look at partnerships with establsihed preschool brands as a prudent option for fulfilling their entrepreneurial aspirations with great success. However, they should do proper homework and complete research before entering into a contract with selected franchise.

Related: Determined to succeed!

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